Citigroup stated that these preferred securities will be redeemed at $25.00 plus certain amount per redeemed TruPS as accumulated and unpaid distributions until the redemption date arrives. The redemption is scheduled to take place on Apr 28, 2014.

The redemption depicts Citigroup’s efforts toward increasing the efficiency of its funding and capital structure under Basel III. Notably, in 2013, the company redeemed $12 billion of senior debt, subordinated debt, preferred and trust preferred securities.

TruPS redemption is viewed as a positive step for the banks, enabling them to bring down interest expenses, as these securities demand higher rates than other securities and often the banks replace TruPS with equity or other low-cost debt. Further, according to the Dodd-Frank Act, banks are no longer allowed to consider these securities as regulatory capital beginning 2013.